FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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18.2
**Educational Content on Manufacturing Process Inventory**

---

**Overview:**

In this exercise, we analyze the work-in-process inventory at Moon Glazers, Inc., a company producing telescopes. The production process involves the addition of materials at the beginning and labor and overhead evenly throughout. The data provided covers the months of January and February, with the percentage completion of units at the end of each month.

**Details:**

*Work-in-Process Information:*

- **January:**
  - Number of units in beginning work-in-process inventory: 0
  - Number of units started during the month: 400
  - Total number of units transferred to finished goods: 300
  - Units remaining in work-in-process: 60% complete

- **February:**
  - Number of units in beginning work-in-process inventory: 100
  - Number of units started during the month: 500
  - Total number of units transferred to finished goods: 140
  - Units remaining in work-in-process: 80% complete
   
**Tasks:**

a. For January, calculate the equivalent units produced for each of the two cost categories—direct materials, and labor and overhead.

b. For February, perform the equivalent units calculation for each of the two cost categories.

This exercise aids in understanding how work-in-process inventory is managed and calculated within a manufacturing setup, offering insights into process efficiency and cost management.
Transcribed Image Text:**Educational Content on Manufacturing Process Inventory** --- **Overview:** In this exercise, we analyze the work-in-process inventory at Moon Glazers, Inc., a company producing telescopes. The production process involves the addition of materials at the beginning and labor and overhead evenly throughout. The data provided covers the months of January and February, with the percentage completion of units at the end of each month. **Details:** *Work-in-Process Information:* - **January:** - Number of units in beginning work-in-process inventory: 0 - Number of units started during the month: 400 - Total number of units transferred to finished goods: 300 - Units remaining in work-in-process: 60% complete - **February:** - Number of units in beginning work-in-process inventory: 100 - Number of units started during the month: 500 - Total number of units transferred to finished goods: 140 - Units remaining in work-in-process: 80% complete **Tasks:** a. For January, calculate the equivalent units produced for each of the two cost categories—direct materials, and labor and overhead. b. For February, perform the equivalent units calculation for each of the two cost categories. This exercise aids in understanding how work-in-process inventory is managed and calculated within a manufacturing setup, offering insights into process efficiency and cost management.
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